Engineering the future, our next milestone…

2 weeks ago @ the Microsoft Dynamics AX Technical Conference 2011 in Redmond, we reached an important milestone, as we disclosed more details on our next major release, Microsoft Dynamics AX 2012 (previously code-named Microsoft Dynamics AX '6') to our technical community. I believe this release reflects a major advance in the architecture of ERP applications. In this blog, I will start highlighting some of the innovations of this release and the key benefits for partners and customers. In today’s blog post I will touch upon some of the key fundamentals that change the way ERP applications are being designed and build.

So, why do we fundamentally change the ERP architecture, and why now? Most ERP applications in market today stems from being designed in the ‘80s, often built as distinct functional modules with monolithic design characteristics. These systems were designed to support stable organizations with stable, high-volume supply chains. Globalization, changing customer buying behavior and increased regulations are increasing uncertainty and supply chain complexity. Most of these architectures have never evolved to meet the needs for agility and simplicity to help fulfill the requirements of customers operating in today’s rapidly changing business conditions, making it difficult and costly to implement change. This in combination with a rapidly changing workforce and technological innovations create a perfect storm. In which we promise to deliver our customers an ERP solution that is an asset in the face of change, not a liability!

Microsoft Dynamics AX 2012 delivers on these promises with a next generation ERP architecture that provides:

A Model Driven Layered Architecture – this architecture will accelerate the application development process for our partners and customers, enabling them to build solutions more quickly, to write less coding and deliver the solution more quickly. 'Layering' in the model store allows efficient support of a base model, extended for localization, industry specialization, and on top of that, ISV (vertical) specialization as well as reseller specialization and customer specific customization. 'Layering' in the model store allows efficient support of a base model, which is extended for localization and industry specialization, and can be further extended with ISV (vertical) specialization as well as reseller and customer specific customization. This provides the ability to model very granular changes and effectively manage the application deployment lifecycle starting with ISVs who design and extend to a specific solution to customer deployments and upgrades of the entire solution.

Unified Natural Models - Too often organizations are being forced to 'fit' the rigid organization and business process models that exist in the ERP software, the design is often 'hard coded' and cannot be easily modified, requiring code development work to change. This is often labeled “best practices”. In addition, ERP systems design often has a narrow process model footprint, optimized to support a sub-set of business processes like discrete manufacturing processes or retail operations. This is often caused by the specialism of the ERP vendor. Over time the larger ERP vendors acquired companies to expand this footprint ending up with a portfolio of solutions. In today’s world of increased uncertainty organizations change or expand their position in a value chain. For example, a wholesaler increases their control on their supply chain by including the manufacturing function or they need to move ‘closer to their end customer’ by investing in a direct distribution channel. Most ERP solutions do not enable such changes in strategy putting these organizations at risk!

A key focus in the architecture of Microsoft Dynamics AX 2012 has been to facilitate flexible organization and business process models. These models can be set up when implemented for an organization and more importantly can be kept up-to-date and support the changes in business requirements, without having to modify the software source code or even implement different ERP systems.

Easy-to-use Financial Dimensions provide improved visibility with unlimited, real-time views on the business

A comprehensive organization model that enables an organization to change structure easily when the business requires to do so.

Business Process change without writing or changing code; enabled with processes and policies that are being captured in modeled workflows.

And finally, a unified business process repository, including the support of business processes in multiple industries, enables business process as well as business model innovation. For example this enables a manufacturing organization to implement Lean Manufacturing, MRP and Batch process principles for their organization in one system implementation.

Pervasive Interoperability - Seamless, pre-built interoperability between ERP, Microsoft Office productivity applications as well as application platform technologies is a key requirement for a modern ERP architecture; however this is too often solved by adding additional ‘middleware’, drastically increasing the cost of integration.

Microsoft Dynamics AX 2012 offers productivity and familiarity by design through pre-built interoperability with applications like Microsoft Office and SharePoint extending the reach of the ERP solution within an organization. 'Blurring the line’ between user experiences in addition to the ability to manage structured and unstructured data in the same experience directly improves the productivity of end users

In addition, the application platform from Microsoft offers lots of important capabilities like Business Intelligence (MS-SQL SRSS & SSAS), security (Active Directory) and workflow (Windows Workflow Foundation). These have become part of a modern ERP application architecture and need to be pervasive throughout the application. This pre-built interoperability does not only benefit customers by providing a more seamless experience but also allows developers to spend less time on technical integration and compatibility, and increases the breadth of developer resources available to ISVs.

For this release we’ve worked with more than 185 organizations via various early adopter programs. These customers and partners are instrumental by providing feedback early on in the development cycle, we received great responses from people that have experienced this innovation and the positive impact it can have on their business. In addition, we see more and more market leading ISVs who focus on vertical solutions like Tyler Technology (Public Sector), GFI Infogen (Public Sector – France), Aldata (Retail) and more recently Lexis Nexis (Law firms) who all build their solution on top of Microsoft Dynamics AX 2012 to lead the generation shift in ERP!